Family ties help Comcast

Father-son team builds cable giant's empire

About 47 years ago, Ralph J. Roberts founded Comcast. He was a middle-aged man who had recently abandoned the belt and suspender business, and was looking for something new.

He found it in a tiny company in Tupelo, Miss., which was erecting a giant antenna to provide the local citizenry with signals from the television stations in Memphis, Tenn., 90 miles away.

At that moment, Roberts became a cable pioneer. Along with Ted Turner, John C. Malone, Charles F. Dolan of Cablevision, John J. Rigas of Adelphia and a handful of others, he was one of the men who built the cable industry, pulling off one of the more unheralded achievements in modern business: getting people to pay for something they had always assumed would be free.

Today, most of the cable pioneers have sold out or retired, or, in the sad case of Rigas, gone to jail. But in his understated Philadelphia way, Roberts turned out to have more ambition than the lot of them, and lo these many years later, his company is the biggest cable provider in the country.

It serves about 25 million subscribers, employs 90,000 people and will generate an estimated $31 billion in 2007 revenue.

Except that it isn't his company anymore. Not really. While Roberts, now 87, remains a Comcast director, Comcast is his son's company now.

And therein lies a story that is pretty unusual in corporate America. And pretty instructive, too.

Think for a minute about the generational sagas you usually read about in the business pages. Rupert Murdoch's son, Lachlan, decides he can no longer work for his father, so he quits his job as the publisher of the New York Post.

Charles Dolan and his son, James, who control Cablevision, always seem to be fussing and feuding about something.

Sumner M. Redstone's daughter, Shari, has long been viewed as his heir apparent. But her octogenarian father can't bring himself to let go of his companies, and he has a deep need to show the world who's boss. Just last fall he publicly criticized his daughter - even as he was being sued by his son, Brent.

It's never been like that with Ralph Roberts and his son Brian, who became Comcast's president in 1990 at the age of 31, and has been chairman and chief executive since 2004.

"Theirs is a relationship of love and mutual respect," said David Calhoun, a former Pennsylvania politico who joined the company five years ago as executive vice president. "They are incredibly close."

Brian Roberts knew he wanted to work for his father from an early age, and Ralph Roberts knew pretty quickly thereafter that he wanted his son to finish what he'd started.

As far as anyone can tell, they've never had so much as an open disagreement at Comcast, despite all the obvious stresses that running a business can put on any relationship.

Although Comcast has not been a knockout stock, that's mainly because Wall Street is annoyed that Brian Roberts won't use some of the cash flow Comcast is generating these days to take on more debt and buy back shares.

The reason Comcast wasn't piling on debt, Brian Roberts said, was that the company has always been run conservatively; that was a cultural value his father, a product of the Depression, had instilled from the start.

"My father used to have two years' worth of cash on hand," Roberts said. "Cash! If we owed $5 billion, we might have $500 million in cash, earning just 2 percent. We were super conservative in a business that was wildly leveraged." That the son had adopted the father's fiscal conservatism was something Roberts wasn't about to apologize for.

Indeed, to hear Roberts tell it, his father was the greatest entrepreneur in the history of the cable industry. He kept peppering his answers with references to his dad, and every time he did his eyes would light up.

"My father has a wonderful mentoring style," Roberts said. "He would never say, `This is a terrible idea.' Instead he says, `Have you thought about this?' "

When he was as young as 12 and 13, he would ask his father if he could sit in on meetings while his father was negotiating loan agreements with the banks. Afterward, the son would ask questions about why the father had taken this tack or that one. Other fathers and sons went to ballgames, but this is how the Robertses bonded.

When Brian Roberts graduated from Wharton business school, his father resisted bringing him into Comcast immediately; he felt his son would be better served gaining some experience elsewhere. But the younger Roberts didn't want to work anyplace else.

"My father is 40 years older than I am," he said. "His father had died when he was 15. His mother died when he was 19. His brother had passed away in his 50s. How many good years were we going to have together?"

So Ralph Roberts relented, and the son joined the company. It was obvious from Day 1 that he was the heir apparent, but the elder Roberts insisted that he work his way up.